9M’25 highlights
M&A volume rises despite deal count dropping to a five-year low
During 9M’25, the number of announced M&A deals fell 7% YoY to 36,950 globally, from 39,781 in 9M’24. However, the total deal value increased 33% to USD3.1 trillion, marking the strongest period for dealmaking since 2021. Regionally, M&A activities increased in the US and Europe by 25% and 11% YoY, respectively, with the US accounting for 47% of the total deal volume, the lowest since 9M’23. Similarly, with a 41% YoY increase in overall activities, 9M’24 was the strongest period for APAC M&A in the last three years. High interest rates, geopolitical tensions, and economic uncertainty driven by tariffs continued to dampen global M&A sentiment. Despite these challenges, the technology and industrials sectors led the market, accounting for 20% and 15% of total global deal value, respectively.
Global debt capital market (DCM) activity remains strong
Global DCM activity remained strong in 9M’25, reaching USD9.5 trillion, up 12% compared with 9M’24. This represents the most robust first nine-month performance for DCM activity since 1980. The number of new offerings introduced during 9M’25 rose by 7% YoY to an all-time high of just over 27,780. Investment-grade corporate debt issuance grew by 8% during 9M’25, compared with 9M’24. It marks the strongest start on record for global high-grade corporate debt. Similarly, high-yield debt issuance rose by 20% YoY to a fouryear high. Green bond issuance totaled USD393 billion, reflecting a 1% surge compared with 9M’24. However, green bond activity decreased 22% on a QoQ basis, compared with Q2’25. From a sectoral standpoint, the technology, consumer staples, and materials sectors recorded double-digit percentage growth in DCM activity compared with 9M’24.
ECM activity reaches a four-year high
During 9M’25, global equity capital market (ECM) activity rose to USD527 billion, up 17% YoY. This increased ECM activity marks the strongest first nine-month performance for global ECM activity in four years. The US accounted for 35% of total issuances, with proceeds rising 15%, compared with 9M’24. Similarly, ECM activity in China doubled YoY, reaching its highest first nine-month share of global ECM activity in the past two years. Global initial public offerings (IPOs), excluding special purpose acquisition companies (SPACs), totaled USD88 billion, up 25% YoY. The surge marks the strongest nine-month period for IPOs since 2023. IPO proceeds on US exchanges rose by 17% YoY, hitting a four-year high. Convertible offerings reached USD122 billion, up 50% YoY, and accounted for 21% of total ECM deals. The technology, financials, and industrials sectors were the most active, collectively accounting for 60% of all convertible issuances in 9M’25.
Top five M&A deals (H1’25)
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Date of announcement
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Acquirer’s Name
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Acquirer’s Location
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Target
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Target’s Location
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Value (USD billion)
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Target’s Industry
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Deal type
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|---|---|---|---|---|---|---|---|
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Jul 29, 2025
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Union Pacific
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US
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Norfolk Southern
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US
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71.5
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Industrials
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Cash & stock
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Sep 29, 2025
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PIF, Silver Lake & Affinity Partners
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US
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Electronic Arts
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US
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49.4
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Tech
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Cash
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Jun 3, 2025
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Toyota Fudosan
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Japan
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Toyota Industries
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Japan
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25.9
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Industrials
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Cash
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Mar 18, 2025
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Alphabet
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US
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Wiz
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US
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32.0
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Tech
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Cash
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Jan 10, 2025
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Constellation Energy
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US
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Calpine
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US
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26.9
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E&P
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Cash
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Investment banking revenues rebound as market conditions improved
In 9M’25, investment banking revenues across major banks rebounded, driven by improved global market conditions. However, both equity and debt underwriting activities continue to face challenges. The resurgence of mega deals, increased boardroom confidence supported by strong corporate earnings, expectations of potential interest rate cuts later this year, and buoyant capital markets were key drivers of this recovery. Looking ahead, market performance is expected to strengthen in 2025-2026, supported by pent-up M&A demand and a robust deal pipeline, provided macroeconomic conditions remain stable amid tariffs, trade policy, and inflation.
Note: Revenues for Deutsche and Barclays were converted into USD using the exchange rate as of September 30, 2025
Revenue for Deutsche Bank reflects revenue from Origination & Advisory services
Bulge bracket investment banks – 9M’25 highlights
JP Morgan’s investment banking fees increased 11% YoY in 9M’25. The upside in fees was due to high product fees across categories, with strength in equity underwriting, as the IPO market was active against a supportive backdrop. Advisory and ECM fees increased 10% YoY each in 9M’25, whereas DCM fees increased 12% in the same period.
The bank’s pipeline remains robust, and the outlook, along with the market backdrop and client sentiment, remains upbeat.
Goldman Sachs’ investment banking fees increased 42% YoY in Q3’25, primarily due to significantly high net revenues in advisory and debt underwriting. Advisory net revenues increased 60% YoY in Q3’25, driven by a significant increase in completed M&A volumes. Equity underwriting increased 21% YoY in Q3’25, supported by initial public offerings, whereas debt underwriting increased 30% YoY in Q3’25, reflecting an increase in leveraged finance activity. The firm’s investment banking fees backlog was essentially unchanged, compared with the end of Q2’25, and higher compared with the end of 2024. The bank remains stable, and management expressed optimism about continued deal activity.
In Q3’25, Morgan Stanley’s investment banking revenues increased 44% YoY, reflecting strength in M&A advisory and debt underwriting. Advisory revenues surged 25% YoY, driven by higher completed M&A transactions. Equity underwriting revenues increased 80% YoY, due to high IPOs and convertible offerings in a constructive market environment.
Fixed income underwriting revenues increased 39% YoY, driven by high non-investment grade and investment grade loan issuances. Themes around emerging technologies and renewed investor appetite in Asia contributed to better results. With a similar focus on growth companies, the bank’s pipeline is good across regions.
Bank of America’s investment banking fees surged 43% YoY in Q3’25, with strong growth in advisory and debt underwriting. Revenues from advisory, debt underwriting, and equity underwriting revenue increased 51%, 42%, and 34% YoY respectively in Q3’25.
The bank’s activity pipeline increased in Q3’25 due to a more constructive market environment and maintained the #3 investment banking fee position, gaining market share during Q3’25.
Citi’s investment banking fees increased 17% YoY in Q3’25, reflecting secular growth in advisory, equity capital markets, and debt capital markets. Advisory fees increased 8% YoY, driven by momentum across several sectors, continued share gains with financial sponsors, and more sell-side activity. ECM fees surged 35% YoY in Q3’25, driven by growth across all products, notably in convertibles, given the favorable market environment. DCM fees increased 19% YoY, due to leveraged finance issuances.
Deutsche Bank’s revenue from origination and advisory (O&A) business increased 27% YoY in Q3’25, due to a 34% YoY increase in debt origination revenue, which partly reflected a recovery in leveraged finance markets. Equity origination revenues increased 57% YoY in Q3’25, driven by strong issuance activity, and advisory revenues were down by 3% YoY in the same period. The improved performance in Q3’25 is expected to continue in Q4’25 as advisory business seeks to build on the development seen in the business over the last eighteen months, and a strong pipeline for Q4’25. Equity origination business is expected to continue providing a competitive offering across products, with a specific focus on IPOs.
UBS’s advisory revenue increased 47% YoY in Q3’25, largely driven by an increase in M&A transaction revenues. Revenue from the capital market increased 42% YoY during the same period, and included the gain from the sale of a stake in CSS, partly offset by a decrease in accretion of PPA adjustments on financial instruments and other purchase price allocation (PPA) effects. Excluding the gain and other effects, revenue from the underlying capital market increased 55% YoY in Q3’25, as LCM fees nearly doubled due to outperformance in the Americas and EMEA, and ECM revenues grew by 1.5x, driven by the pronounced uptick in IPOs and convertible activity. For Q4’25, the management expects banking activity to normalize from Q3’s exceptional levels.
Barclays’ investment banking (IB) fee income decreased 2% YoY in 9M’25, primarily due to a 12% decline in fees in the equity capital market. The decline in the market fee was due to a strong prior year comparator, which included a large UK rights issue in Q2’24, partially offset by debt capital markets fees. Advisory fee income decreased 2% YoY during the same period. In Q3’25, Barclays delivered a return on tangible equity (RoTE) of 10.6% and is on track to deliver 2025 guidance and 2026 targets.
M&A advisory firms – 9M’25 highlights
Similar to investment banks, the revenue of major advisory firms rebounded in 9M’25. While most firms recognize the heightened risks from ongoing geopolitical tensions, economic uncertainty, inflationary pressures, and volatile market conditions, they remain optimistic. Looking ahead to the rest of 2025, these firms expect better access to debt capital and an increase in deal-making activity. However, uncertainty surrounding tariffs remains a key risk.
Note: Houlihan Lokey’s fiscal year ends in March (represents numbers for the three months ending September 25).
M&A advisory firms’ performance and updates
Lazard’s financial advisory revenue increased 5% YoY in 9M’25, due to an increase in the average fee for completed transactions compared with 9M’24. The firm participated in several marquee transactions during Q3’25, reflecting collaboration across banking teams and the strength of the global franchise. The management sees an increasingly constructive environment for advisory activity. The firm has hired 20 Financial Advisory managing directors in 2025 to date and remains on track this year to achieve or even exceed its 2030 objective of expanding the team of financial advisors by 10 to 15 net per year.
Moelis’ revenue increased 36% YoY in 9M’25. The upside was due to an increase in average fees earned per completed transaction in M&A and capital markets. The upside was partially offset by a decline in capital structure advisory. During Q3, three managing directors focused on products and sectors, including M&A, capital markets, and metals and mining, joined the Firm. The firm continues to execute its organic growth strategy.
Evercore’s advisory fees increased 34% YoY in 9M’25, reflecting higher revenue from large transactions and a large number of advisory fees earned. Underwriting fees decreased 1% YoY during the same period due to a decrease in the number of transactions. The downside was offset by an increase in the average fee size of the transactions the firm participated in. The US M&A advisory business continued to gain momentum across sectors, and the European advisory business delivered its strongest quarter so far. The firm anticipates continued growth in M&A activity and maintains a diversified revenue stream, with 45% of its Q3’25 revenues coming from non-M&A businesses.
Houlihan Lokey’s revenues increased by 16% YoY in 6M’25, primarily due to a rise in the number of fee events, driven by improvements in M&A activity and higher average transaction fee. The firm’s financial and valuation advisory business is gaining momentum in line with the market recovery. Also, it performed well in the first half of the year despite market uncertainties and entered the second half of the year with a better macro environment than it had in the last 6 months. If conditions remain on the current trajectory, it is well positioned to continue to experience year-over-year growth.
PJT’s advisory revenue rose 17% YoY in 9M’25, primarily due to growth in strategic advisory revenue. The company’s full-year outlook remains largely unchanged, with expectations for a significant increase in strategic advisory revenue in Q4’25. PJT.
Partners anticipates strong growth in its strategic advisory division, with projections to surpass 2024 levels. Future guidance indicates a gradual improvement in M&A activity, supported by easing economic and regulatory uncertainties.
PWP’s revenues declined by 18% YoY in 9M’25, primarily due to a reduced contribution from M&A activity, partially offset by increased contribution from restructuring and liability management. Although Q3’25 did not do well, the firm highlighted record engagement levels, a 50% YoY increase in European business, and strategic growth through the Devon Park acquisition. Management also reduced expense growth guidance and highlighted a strong outlook for 2026 driven by recent hires and enhanced product capabilities.
The road ahead
Financial sponsors poised to reemerge as key drivers of M&A activity
Over the past three years, higher interest rates have raised borrowing costs and lowered corporate valuations, prompting financial sponsors to delay asset exits. This has resulted in a buildup of unsold assets, creating a backlog expected to drive a strong rebound in M&A activity in 2025. Private equity firms, facing increased pressure to return capital to investors, will be motivated to monetize existing assets before initiating new fundraising efforts. Additionally, the relatively lower valuations of publicly traded companies outside the US offer attractive opportunities for sponsors to strategically deploy excess capital.
Corporates set to accelerate capital deployment through M&A
Corporations worldwide are shifting from net sellers to net buyers, signaling renewed interest in strategic acquisitions. This trend is expected to gain momentum throughout 2025, supported by a more favorable macroeconomic and regulatory environment. As the US Federal Reserve's interest rate target is projected to decline to 3.75–4% by year-end, the opportunity cost of holding cash will increase. In response, corporations are likely to adjust their capital allocation strategies, prioritizing mergers and acquisitions over dividends and share buybacks. Additionally, a more accommodative antitrust and regulatory landscape under the new US administration is expected to further encourage strategic deal-making across a wide range of transaction sizes.
Valuation gaps and regional growth expected to fuel cross-border M&A
Over the past five years, the US economy has consistently outperformed those of Europe and the UK, prompting European companies to consider acquiring US firms to gain exposure to a more dynamic market. Conversely, US corporations are increasingly eyeing European targets to expand their international footprint and capitalize on comparatively lower valuations. Meanwhile, fast-growing economies in Asia continue to attract strong interest from private equity firms. As global M&A momentum builds, cross-regional dealmaking in Asia is expected to accelerate significantly, driven by both strategic expansion and the pursuit of high-growth opportunities.
Activist campaigns expected to remain elevated in 2025
With peak interest rates behind us and inflation largely under control, shareholder activism is set to gain momentum in 2025. Activist funds are raising larger capital pools and increasingly targeting bigger, more prominent companies. As geopolitical and market conditions become more favorable for mergers and acquisitions, activists are expected to intensify pressure on corporate boards, especially those seen as having missed strategic M&A opportunities. Companies that resolved activist challenges in 2024 but continue to underperform may face renewed scrutiny and a potential second wave of activism. A stronger M&A environment, with more active buyers, will likely encourage activist investors to push for structural changes at undervalued firms, particularly through corporate separations and spin-offs aimed at unlocking shareholder value.
Corporate simplification expected to drive M&A activity
The global shift towards corporate simplification is expected to remain a key driver of M&A activity in 2025. Companies are increasingly focused on unlocking value by identifying undervalued assets, separating noncore or misaligned business units, and refining their geographic focus. This trend will lead firms to streamline portfolios in line with long-term secular trends, reallocate capital to higher-return opportunities, and enhance strategic clarity. Regional separations are likely to become more common, allowing companies to better target specific investor bases and address operational inefficiencies tied to managing crossregional entities. Additionally, valuation differences across markets will continue to support M&A, as companies seek more favorable capital environments through changes in domicile, stock exchange listings, or corporate headquarters.
Industry-focused M&A activity set to persist
Following several years of heightened regulatory scrutiny, the outlook for bank M&As is improving. Regulatory agencies are expected to ease entry barriers for new market participants and adopt a more accommodating stance toward mergers that meet statutory requirements. Beyond banking, industries such as energy, technology, and healthcare, which have already experienced significant deal activity in recent years, are poised for continued momentum in 2025. This will be driven by strategic realignment, consolidation efforts, and the pursuit of operational efficiencies. Moreover, the anticipated wave of industry transformation fueled by artificial intelligence is catalyzing M&A across the technology sector, with companies of all sizes seeking to strengthen their capabilities and competitive positioning through targeted acquisitions.
Global M&A activity slows amid tariffs and market volatility
As the M&A market contends with a turbulent landscape shaped by sweeping tariffs and broader market volatility, dealmaking has slowed considerably. These new complexities are forcing both buyers and sellers to adopt more nuanced approaches to transaction structuring and risk allocation. At the same time, economic and political instability is making financial forecasting increasingly difficult, further dampening confidence in executing cross-border deals. As a result, global M&A activity has entered a period of hesitation, with many transactions delayed or restructured in response to the evolving trade environment.
